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11 January 2019

Equatorial Guinea publishes Financial Law 2019

Equatorial Guinea’s Financial Law 2019 (FL 2019) was published on 19 December 2019 through Law n°3/2018.

From a fiscal viewpoint, FL 2019 provides that an exemption cannot be granted for Personal Income Tax and has modified the rates of certain taxes. It also introduces a new tax on tourism.

The key provisions include:

  • The minimum income tax (MIT) rate remains at 3% of the turnover realized during the previous year
  • Withholding tax (WHT) on nonresident subcontractors is increased to 20%, (as compared to prior rate of 10%) on the gross income obtained in Equatorial Guinea
  • Withholding tax rates on dividends (clarification) are:
    • Nonresident: 25%
    • Resident (physical person): application of the progressive scale in accordance with the provision of article 252 that may be reduced by issuing a global income return provided under articles 240 and 241 of the General Tax Code (GTC)
    • Resident legal entities: 10%
  • FL 2019 deletes article 461.3 of the Income Tax Law. This article was related to the deduction of the WHT from the final corporate income tax liability.
  • Public contracts (of the State and of autonomous entities and public companies) awarded will be subject to a 2% tax rate on the value of the contract, as a right of registration
  • Tax on hotel stays of XAF1,000 per day and for each “star” of the tourist establishment is established

In application of the GTC in force, special taxes on alcoholic beverages, tobacco and luxury goods are effective for this fiscal year.

For additional information with respect to this Alert, please contact the following:

FFA Ernst & Young, Malabo
  • Alexis Moutome | alexis.moutome@gq.ey.com
  • Maxime Mbassi | maxime.augustin.mbassi@gq.ey.com
  • Davy Ondo | georges.obiang@gq.ey.com
Ernst & Young Advisory Services (Pty) Ltd., Africa ITS Leader, Johannesburg
  • Marius Leivestad | marius.leivestad@za.ey.com
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
  • Rendani Neluvhalani | rendani.mabel.neluvhalani@uk.ey.com
  • Byron Thomas | bthomas4@uk.ey.com
Ernst & Young LLP, Pan African Tax Desk, New York
  • Dele A. Olaogun | dele.olaogun@ey.com

ATTACHMENT

Document ID: 2019-5053

 
 

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